Romania's Integration into European Markets: Implications for Sustainability of the Current Export Boom
In defiance of its unimpressive track in structural reforms and relatively low foreign direct investment (FDI) inflows, Romanian exports have experienced surprisingly strong performance in both European Union (EU) and non-EU markets since 2000 afte...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/11/5449409/romanias-integration-european-markets-implications-sustainability-current-export-boom http://hdl.handle.net/10986/14189 |
| Summary: | In defiance of its unimpressive track in
structural reforms and relatively low foreign direct
investment (FDI) inflows, Romanian exports have experienced
surprisingly strong performance in both European Union (EU)
and non-EU markets since 2000 after a four-year period of
flat growth. While the first phase of growth in 1992-95 can
be easily explained by redirection of trade toward the EU
once the state monopoly over foreign trade was abolished and
other policy areas liberalized, the current second phase of
export expansion raises questions concerning its drivers and
sustainability. Having examined overall foreign trade
performance, evolving patterns of specialization,
Romania's competitiveness in EU sunrise markets,
changes in factor intensities of trade with the EU, and
"intra-product" trade, the authors conclude that
Romania's export offer has become diversified,
reflecting an impressive progress in industrial
restructuring. Restructuring has been facilitated by FDI
inflows, even though they appear to have been too small to
generate such a big effect. Romanian firms have become
increasingly part of international production networks and
traditional global value chains. Sustainability of this
performance depends on maintaining macroeconomic stability
and keeping wage increases in line with productivity growth,
as well as increasing Romania's ability to attract
larger FDI inflows through improvements in business climate
and trade facilitation. |
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